All posts tagged European car makers

BERLIN—Daimler AG said a worsening economic climate in Europe has put its profit outlook for the year in doubt, the latest setback for the maker of Mercedes-Benz cars as it struggles to revive its lagging sales and profitability.

Daimler—long the world’s top-selling luxury car maker until falling behind both BMW AG and Volkswagen AG’s Audi in recent years—originally hoped it would narrow the gap with its rivals this year with the start of a wide-ranging model offensive and multibillion-euro cost-cutting program. Instead, its note of caution suggested it may fall even further behind them.

The difficult truth for Europe’s auto industry, the people who own it and the many thousands who work in it, is that Europeans are driving less and are likely to continue doing so.

It’s a phenomenon dubbed as “peak-car” by analysts at Morgan Stanley.

As well as a declining population in many of Europe’s richer countries, car markets are close to saturation because of the relatively young age of Europe’s passenger-car fleet, a long-running tendency for European drivers to spend less time in their cars, and the increasing durability of modern cars which is squeezing demand for new vehicles.